Posted on 10/30/2006 9:29:13 AM PST by NormsRevenge
$7,300.
That is approximately what each household in California will be asked to cough up to pay for the $42.6 billion bond package on the ballot November 7th, should it pass.
While there is a clear consensus that our infrastructure is in desperate need of repair and expansion there is also a growing cynicism that saddling future generations with $84 billion in bond payments over the next 30 years represents more of the same fiscal irresponsibility we have come to expect from Sacramento.
Despite tens of millions of dollars in campaign spending to support these measures, a hearty array of endorsements from the likes of Governor Arnold Schwarzenegger, Challenger Phil Angelides, and a host of other elected leaders, voters are unenthusiastic about the bonds according to fresh data from the Public Policy Institute of California.
According to their most recent poll, 58 percent think the hefty bond package is too expensive, even though an even larger majority thinks that state government should pay for infrastructure improvements. It is, therefore, no wonder that none of the measures are tracking above the mid to low 50’s of support—hardly a good sign in a state where more than 10 percent of voters remain undecided and late voters tend to vote no.
Fortunately, as the public is increasingly learning, infrastructure can be a priority without issuing Mega-Debt to pay for it. In fact, there are three primary reasons that this bond package should concern voters.
Mega-Debt in a River of Red Ink While the entire bond package is being billed as an investment in our future, supporters never mention that the state already has more than $45 billion in existing General Obligation or Lease-Revenue debt and another $30 billion in debt that has been authorized but not yet enacted. Sadly, few voters are aware of this reality—making the state akin to a family that spends freely with a credit card but never sees a monthly balance. California currently runs an ongoing deficit of $4 to $5 billion. The annual debt payments for these bonds would only add to the structural imbalance and threaten California’s quality of life.
Sadly, over the past few years, the Legislature and Governor have failed to enact the serious reforms contained in Schwarzenegger’s California Performance Review. This 2,500 page analysis of state spending, offered an estimated $32 billion in savings over five years, but virtually none of the reforms have been implemented.
Before Sacramento asks the taxpayers to cough up more money in the form of new debt, they should make better use of the more than $100 billion spent annually through the State Budget. In 1960, bonds accounted for only 16% of infrastructure spending. By 2003, that figure had skyrocketed to 76 percent. At the same time, “pay as you go” General Fund spending on infrastructure has almost disappeared.
As voters are clearly saying, infrastructure should be a priority. This means it should be a priority in the annual budget too. Dedicating as little as 5% of the annual General Fund to improving our transportation systems would have a far greater effect on our quality of life than the $19 billion Transportation Bond (1B).
Moreover, there are private sector investors that are eager to finance long-term infrastructure projects with private funds through innovative public-private partnerships, not taxpayer debt. Going back to taxpayers for money should be the last resort, not the first.
Bond Investments Likely to have only Limited Results There is a rule of thumb that long-term debt should only be undertaken to fund long-term capital projects that will outlast their repayment schedule. While building new highways and bridges can be funded with long-term debt, you wouldn’t go to Best Buy and purchase a computer and finance it over 30 years. Sadly, many areas of the bond package do just that. F
or instance, in the transportation bond, $200 million will go to retrofitting buses and another $1.1 billion will go to improving security in ports, harbors, and transit systems. This money will be used for, among other things, installing new technology systems. In 30 years, much of that technology will be as cutting edge as the 8-track is today.
And far too much of the money will go to ongoing programmatic spending—similar to paying for your groceries with a 30-year loan. For instance, the Housing Bond (1C) would target $625 million of the borrowing on existing homeownership assistance programs (down-payment assistance and taxpayer-subsidized loans or grants). Proposition 1E and 84, which purport to focus on water supplies and resource protection, in reality represent a grab bag of funding for environmental programs, park and recreation facilities, and other non-infrastructure-related water programs.
In general, this bond package reflects what could be characterized as the “manure” approach to spending—spreading it around. Sadly, the bond funds are so broadly distributed geographically and functionally that they will have little impact to most people. While such an approach may be a winning political strategy it is a flawed policy avenue. You will never see a new major highway built with this money because it is spread so thin.
Bonds will Deflate the Cause for Infrastructure Reform Sacramento often utilizes a “fire and forget” approach to problem solving. An issue will emerge as a public priority. A few largely symbolic steps will be taken to addressing the problem. This deflates the political momentum for the issue. Sacramento then turns to other issues. This bond package presents just such a danger—albeit a very expensive one.
Sadly, I have serious doubts that paying $84 billion and receiving only $42.6 billion will lead to a better California. Instead, if the bonds are approved, the public will, for a short time, believe that something is finally being done.
Only slowly, voters will realize that the roads are as congested as ever, housing is as unaffordable as ever, and our water supplies is under continuing strain. Unfortunately, the voters will have already shouldered the $7,300 per household yolk with no ability to change course.
Real reform will elude us. And generations forward will pay the price of this plan.
In general, this bond package reflects what could be characterized as the “manure” approach to spending—spreading it around.
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spreading it around.. like manure. could get kind of stinky.
Of course, that's nothing compared to the debt that the Liberals in Washington have saddled the nation with!
Look out, California leads the way, some say or used to..
For some here, they can't spend money fast enough,, just spreading it around
I would say that the $10 billion (or more) California taxpayers spend on illegal aliens, and that is not counting their anchor babies) would make a very nice down payment on infrastructure repairs, etc.
When they stop supporting Mexico's citizens maybe I will support California spending more money......period.
In 1988, California had about $4 billion in long-term debt.
Now, California has over $40 billion in long-term bonded indebtedness. These new bonds, if all pass, will add a huge amount of new debt on top of the $40 billiion.
California's credit rating is going to sink. Government bonds are rated similar to companies or your own personal credit rating, i.e. how much debt do you have related to income, what is your record of paying bills, etc. If all of these pass, California will have added so much debt that the cost of borrowing will go up, because as a more risky borrower, California will have to pay more interest.
Certain business fundamentals, income and expense, balancing a budget, etc. are important, and too often , people who urge passage of big bond issues aren't thinking long term.
You know, I think that's debatable. Per Capita, this is a whole lot of debt. California about is one tenth of the nation's population, so imagine ten times that on a national scale being added in one year.
What you said doesn't really matter to me, apparently you missed my last line.......
"When they stop supporting Mexico's citizens maybe I will support California spending more money......period."
Not to worry, that will never happen. So I will NEVER vote for anything that costs ANY California taxpayer a dime.
sell the bonds and pay back with worthless inflated dollars spread over 30 years.
What's worse, the liberals won't cut a dime of spending on taking care of the bums and illegals. Instead, they just keep squeezing the prosperous for more and more of their income.
And they wonder why there's a flight of business and talent from the state! My God, I will be so glad to see California for the last time in my rear view mirror when I cross the Arizona state line!
On top of the $30 billion over ten years that they already borrowed for the embryonic stem cell initiative back in 2004.
Add in the millions of low-wage Mexicans converting southern California into an extension of Tiajuana, and you have a state going broke faster than it is leaving the U.S.
http://gov.ca.gov/index.php?/speech/4547/
Q: Why do we need bond measures, or even increases in sales taxes, to improve California’s roads and highways? Why isn’t there enough money in Sacramento to do this? And if there isn’t enough money, what can be done to address that issue?
GOVERNOR: Well, what we are doing here is the perfect way to go about it, because what we are saying is, basically, we want to take 37 billion dollars and we want to rebuild California. That is the key thing, because it hasn’t been done for the last three decades. So both of the parties recognize that, that we have been falling behind and falling behind in transportation infrastructure, our schools, our levees, our affordable homes, all of those things, or affordable housing, all of those things. That in order for us to really live up to 100 percent of our potential here in this state, we need to build all of those things. And so it’s really wonderful to see both of the parties come together and make that commitment and say, “Let us rebuild and let us build for a population of 37 million people.”
Q: Governor, because of the way the California Constitution is written, your state funding only requires a majority vote, but our Measure D, our local money, requires 66.7. This creates a little bit of a game of chicken, where local politicians might say, “We don’t need to pass ours because it’s easier for the state to just fund it themselves.” So what do you say to the citizens of Santa Barbara County about passing Measure D if they assume you’ll widen the 101 anyway?
GOVERNOR: Well, first of all, as you know, there is only so much money that goes around; we have 20 billion dollars. So I think that every community has to think for themselves also. The state and the federal government does a certain portion, and then locally you do a certain portion. So I think all of that has to work together. It is an effort where the local community, the state, and the federal government work together, and I think this is what will enable us to really build a great transportation system for the future. And what is important also is that we don’t just build for 37 million but actually for 42 million people, because in the next five years or eight years we will be 42 million people.
And it’s just very important for the people to know, we know that you’re frustrated, we know that you’re angry that you get stuck in traffic all the time. Now is your chance to let your voice be heard, and this is why I say vote yes on Proposition 1A-1E, on all of those measures, including Proposition 84.
Good Lord!!! What absolute ROT!!!
(snip)
***Prop. 1B: Little for Roads, Lots for Government***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1BBill Leonard writes...
Proposition 1B on the November ballot breaks the record for all previous bonds in California. In fact, at $19.925 billion in principal, it holds the dubious distinction of being the largest bond ever placed before the voters anywhere in the world, even at the national level. If it is approved by voters, future taxpayers will have to pay back well over $40 billion.
By my count, 32% of the funds in this bond are dedicated to funding "highways and roads," which also includes funding for studies, environmental reports, environmental mitigation, and other things that people outside California would not consider road-building. 25.1% of the bond funds are explicitly dedicated to public transit systems that are used by approximately 1.4% of the state's population. 15.6% of the funds are dedicated ports and port security. 1% is dedicated to school buses. The remaining 26.3% is difficult to characterize, but most will be available for public transit systems. This category includes funds that will be spent according to such things as applications from cities and counties for transportation improvements, which might be either roads or public transit.
A good case can be made that we need to invest substantial tax dollars in our inadequate highway system. However, I am not convinced that we need to borrow money from our grandchildren to do so. Our fuel and vehicle taxes are among the highest in the nation, so we need to demand that those taxes be dedicated to roads and highways. Public transit systems have proven themselves to be outrageously expensive, inefficient, and unpopular, so they require massive on-going taxpayer subsidies from people who never use public transit. Before we borrow billions of dollars for new public transit systems, we should find a way to use existing revenues to fund road and highway improvements. I urge a NO vote on Proposition 1B..
(snip)
***1E: Money Down the Drain***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1EBill Leonard writes...
Proposition 1E is known as the “Flood Bond,” a $4.09 billion general obligation bond placed on the November ballot by the Legislature to be paid with interest from General Fund taxation. The bond was proposed to fund flood control and environmental projects, but there is not one specific project named in the text. You are asked to trust the Legislature and the Governor to spend this money as they see fit.
In fact, despite the huge cost, this bond contains only enough funding to repair or rebuild a few dozen miles of levees, in a state with more than 2,000 miles of levees that need maintenance. A break anywhere along a levee will flood the land down stream, so it is not clear how much extra protection we are really buying. Critics have argued that it would be cheaper to build pipelines and canals to deliver drinking water, such as the Peripheral Canal, than it would be to continue to maintain the Delta levees, which primarily protect private farmlands growing subsidized crops on land that is sinking further below sea level every year.
I still prefer the pay-as-you-go approach to save all the interest money from being squandered. If we really have $8 billion over the next 30 years to spend on flood protection, then why set aside $3.9 billion of it for interest payments with no benefit to California? Vote NO on Proposition 1E.
Dang right! And build Auburn Dam to protect the Capitol and the whole Bay Delta eco-system with all it's aging, rotting, sinking levees!!!
If I lived there, here is how I would vote:
1A - Yes
1B - No
1C - No
1D - No
1E - No
83 - Yes
84 - No
85 - Yes
86 - Yes (although I would pressure for tax cuts elsewhere)
87 - No
88 - No
89 - No
90 - Yes
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